What's Good for GM ...
The lure of cheap overseas labor is destroying a way of life
The world has changed since the chairman of General Motors first proclaimed, four decades ago, that "what's good for GM is good for America." For one thing, GM is now the largest private employer in Mexico, where it employs 72,000 people producing parts. Several thousand of those jobs used to reside in Flint, Mich.Skip to next paragraph
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Workers there have watched in frustration for 20 years as big chunks of machinery, equipment, and their town's future were sent south like migrating birds to Matamoros, Mexico.
Flint auto workers walked off the job last month to try to keep some of the remaining jobs in the US. The strike has idled 162,700 workers and shut down 26 GM plants.
Comparisons are being made to last year's successful Teamsters strike against United Parcel Service, which was hailed as a turning point for organized labor. A powerful company was forced to make significant concessions on wages and job security - in that case there was overwhelming public support for the strikers. GM is betting that people won't sympathize as much with the auto workers. They are more hidden from public view, and the press often portrays them as overpaid remnants of a bygone era. In reality, the starting wage for Flint auto workers is $13 an hour, which is just 27 cents more than the average wage for all workers in the US - an average that includes everyone flipping burgers at McDonald's or Burger King. But most auto workers make considerably more than the starting wage, and this offends some people's sense of justice.
GM executives may be surprised to discover that not everyone is outraged that a US auto worker could earn enough to buy a home and support a family. There are still many people who can remember when such things were common occurrence.
It's not as if America - or GM, which posted a $1.6 billion profit last quarter - can't afford to employ such workers at home at a decent wage. Although most employees don't have much to show for it, this economy has been growing for eight years. Our national income now stands at more than $27,000 per person - that includes children and babies.
Of course it's hard for GM to resist the lure of the Mexican workers in Matamoros, who are paid between $1 and $2 an hour and live in dirt-floor shacks. When these workers try to organize independent unions they are confronted with the power of the Mexican government, which does not permit such activity. The Mexican government is backed by our government, which of course is quite cozy with GM. So what's good for GM isn't all that good for Mexico either.
Many people - including some of our leading intellectuals and pundits - write all this off as the inevitable march of history and technology. In the "new global economy," they say, these kinds of reasonably well-paid jobs for American workers have gone the way of the typewriter.
But the changes that have pulled the rug out from under US workers over the last 20 years aren't the result of blind, inexorable forces. They're mostly due to deliberate policy decisions. From the duty-free import arrangements of the '60s and '70s to the North American Free Trade Agreement (NAFTA) in the '90s, great care has been taken in the rewriting of laws and the "cultivating" of foreign leaders to create this "new global economy," in which corporations like GM would find it increasingly profitable to move to cheaper labor markets. Even today, as the Clinton administration seeks to extend NAFTA to Central and South America, it has stubbornly refused to incorporate enforceable labor or environmental conditions into the agreement.
GM is spending billions on new plants in China, Thailand, Argentina, Poland, and Brazil. Meanwhile, US auto workers struggle to keep some decent-paying jobs from being downsized, outsourced, and exported out of the country. If that's not worth fighting for, what is?
* Mark Weisbrot is research director at the Preamble Center for Public Policy and a research associate of the Economic Policy Institute in Washington.